A

PROJECT
REPORT
ON

“REVENUE BUDGETING”

IN PARTIAL FULFILLMENT OF MASTER IN MANAGEMENT STUDIES

UNIVERSITY OF MUMBAI

(2009 -2011)

SUBMITTED BY

Samruddhi Mahadik

GUIDED BY

Prof. Rachel R.

SHIVAJIRAO S JONDHLE INSTITUTE OF MANAGEMENT SCIENCE AND

RESEARCH

1
 PREFACE

I am student of MMS-Second year (SEM III) and submitting this

report on Revenue Budgeting as a part of summer internship program.

This project talks about the budgeting and revenue budgeting.

Explains the concept of revenue budgeting. Revenue forecasting constitutes
the important part in revenue budgeting. So revenue forecasting concept is
also included in this project.

Going further this project also includes organizational

implementation of these concepts. I have completed summer internship from
MTNL, So application of revenue budgeting in the organization is also
described. The main focus of this report is on how the revenue project
travels through the organization i.e. whole life cycle of revenue budget from
preparation till execution.

2
 DECLARATION

I HEREBY DECLARE THAT A PROJECT ENTITLED “ TOPIC NAME”

IS SUBMITTED IN FULFIULLMENT OF MASTERS IN MANAGEMENT STUDIES
DEGREE OF UNIVERSITY OF MUMBAI IN ACADEIC YEAR 2009-2011 AND WAS
CARRIED WITH SINCERE INTENTION .

THE PROJECT DURATION WAS FROM MAY 2010 TO JULY 2010 .TO
THE BEST OF MY KNOWLEDGE IT IS AN ORIGINAL PIECE OF WORK DONE BY
ME AND IT HAS NEITHER BEEN SUBMITTED TO ANY ORGANISATION AND
NEVER PUBLISHED BEFORE.

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 With great pleasure we take this opportunity to
acknowledge our gratitude to all professors of our college for
their utmost support, help and providing us her expertise
thoughts.

We sincerely wish to thanks our project guide and

the main motivator behind this endeavor for their ever
encouraging and inspiring guidance.

We wish to thank Mr. Chandra Prakash of Mahanagar

Telephone Nigam LTD., Mumbai for providing us valuable
information regarding the project.

Our sincere thanks to the staff S.S. Jondhale institute

of management, research and science, Asangoan

-------------- Samruddhi
Mahadik

4
 INDEX
No. PAGE
CHAPTER NO. TITLE
NO.

CHAPTER – I INTRODUCTION

A. Background study

I) Budgeting 2-3

II) Revenue Budgeting 4-5

III) Revenue Forecasting 6

B. Company profile 7 - 13

C. Literature review 14 - 17

D. About Study

Objectives 18

Scope of the study 18

Period of the study 18

Limitations 18

Chapter scheme 19

CHAPTER – II RSEARCH METHODOLOGY

I) Research process 21 - 22

II) Research design 22

III) Data collection 23

V) Tools used for data collection 24

VI) Sources of Data 24

CHAPTER – III ANALYSIS AND INTERPRETATION 26 - 85

CHAPTER - IV Findings 87

Suggestions 88

Conclusion 89

5
BIBLIOGRAPHY 90

6
 CHAPTER – I

INTRODUCTION

7
 BUDGETING

A business/Organization is typically formed to earn profit that will increase

the wealth of its owners and grow the business itself. The owners and
operators of a business have as one of their main objectives, the receipt or
generation of a financial return in exchange for work and acceptance of risk.
To achieve objectives of the business/organization follows management
approach and performs the management functions: Planning, Organizing,
Directing, Controlling.

Planning involves the specification of the basic objectives that

the organization will pursue and the fundamental policies that will guide it. In
operational terms, it involves four stages:

1. Creation of Objectives

2. Formation of Goals

3. Planning Strategies

4. Budgeting

A Budget is generally a list of all planned expenses and

revenues. It is a plan for saving and spending.

Budgeting is an activity of construction of budget.

Budgeting creates the comprehensive and coordinated plan, expressed in

financial terms, for the operations and resources of an enterprise for some
specified period in future.

Advantages of Budgeting
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 The budgeting tells organization how much money is needed to carry
out activities.

 The budgeting forces to be rigorous in thinking through the

implications of activity planning. There are times when the realities of
the budgeting process force to rethink about action plans.

 Used properly, the budgeting tells when organization will need certain
amounts of money to carry out activities.

 The budgeting enables to monitor revenues and expenditure and

identify any problems.

 Organization cannot raise money from investors unless have a budget.

Investors use the budget as a basis for deciding whether what
companies are asking for is reasonable and well-planned.

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 REVENUE BUDGETING

In business, revenue is income that a company receives from its normal

business activities, usually from the sale of goods and services to customers.
In many countries, such as the United Kingdom, revenue is referred to
as turnover. Some companies receive revenue
from interest, dividends or royalties paid to them by other companies.

Revenue is the primary driver of a company’s activities. Because

it leads to all three main financial reports: Cash flow, Balance sheet and
profit and loss and So the need for revenue budgeting arises.

A revenue budgeting identifies each of the individual revenue

sources for which the organization is to be responsible; estimates the
amount of revenue each is to "earn" in the budget year; documents the
basis for the estimate and other important information about each source;
and assigns responsibility for revenue management (including estimate
updating) to a specific organization unit/manager.

A management responsibility to be associated with revenue

budgeting is the development of monthly plans for revenue recognition and
collection.

The Revenue Budget consists of revenue receipts and the

expenditure met from these revenues.

Revenue budgeting is the most important and necessary step in

budgeting for most companies, whether small and private or large and
public. But it is also typically the most difficult task because it signifies the
maximum level of uncertain forecasting. One aspect of uncertain forecasting
is the economy, which is hard to predict and can have major effect on the
revenues of the company. Many other aspects can have an effect on

10
revenue, such as natural disaster, a top customer giving business to a
competitor or a new law enacted by the government.

Objectives of Revenue Budgeting

 The basic objective behind revenue budgeting is to increase the

revenue of the organization/ firm.

 Enable the company to plan for many costs such as raw material ,
employee compensation, Since some costs are directly associated with
the sales

 Enable organization to determine their cash reserves.

These objectives should be communicated from the top down

and they should be explained so that everyone involved in the budget
process understands each and every objective and so contribute dedicatedly.

When the organization undergoes revenue budgeting process,

identifies each source of revenue and estimates how much revenues that
source will generate in particular budgeted year. It is nearly impossible to
predict annual revenues precisely, particularly for source or businesses, but
it is critically important for companies to create high-quality revenue
budgets. Here the concept of revenue budgeting comes into the existence
and plays crucial role in revenue budgeting.

11
 REVENUE FORECASTING

Understanding revenue forecasting practices is essential in

assessing budget planning and management processes. Revenue forecasts
define the budget envelope and form the basis for effective medium-term
planning.

Executives, managers and financial analysts in organization turn

their attention to the critical but extremely challenging process to develop
revenue budgets for the fiscal year. Managers with revenue responsibility
spends weeks (and in some cases months) assessing market conditions,
conducting analyses and negotiating with peers and superiors to set revenue
expectations for next year.

It has been experience of many years that developing and

managing revenue budgets that it is almost impossible to predict revenues
precisely. This is due to the fact that the dynamics of the economy, the
marketplace and company decision making can never be captured fully
beforehand. It is doubly difficult to predict revenues when new products or
emerging markets are involved, due partly to the absence of historical data
to which managers and analysts can point to substantiate expectations.
Large corporations cope with these realities partly by installing quarterly
forecast cycles that capture new information as each fiscal year progresses.
This approach improves the accuracy of forecasts but is cost prohibitive for
small or medium size companies to employ.

Understanding thoroughly how revenue sources works. How

much those sources are generated in past years and in particular situations
or cases or conditions how they were reflected. This will help to forecast
revenues.
12
 ABOUT MAHANAGAR TELEPHONE NIGAM LTD.

Mahanagar Telephone Nigam Ltd (MTNL) – Indian government

owned telecom giant were started in 1882 in pre independence era as
Bombay Telephone and after that in 1st April 1986 emerged as an
independent organization. MTNL was set up on 1st April, 1986 by the
Government of India to upgrade the quality of telecom services, expand the
telecom network, and introduce new services and to raise revenue for
telecom development needs of India’s key metros – Delhi, the political
capital and Mumbai, the business capital of India. The company was
a monopoly until 1992, when the telecom sector was opened to other service
providers. In the past 21+ years, the company has taken rapid strides to
emerge as India’s leading and one of Asia’s largest telecom operating
companies. Besides having a strong financial base, MTNL has achieved a
customer base of 8,182,133 as on 31st August, 2009.

The company has also been in the forefront of technology

induction by converting 100% of its telephone exchange network into the
state-of-the-art digital mode. The Govt. of India currently holds 56.25% stake
in the company.
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In the year 2008-09, the company is focusing on 3G Service, Broadband,
IPTV & VOIP customer base, achieving at least 7, 50,000 broadband
customers, and further expanding its operations through acquisitions and
Greenfield licenses in overseas market.

MTNL have services have always been in forefront in introducing

new services: Landline, High speed broadband ADSL. They are the first
operator who launched 3G service in India.

The company has been set up to take over the management,

control and operation of Delhi Telephone District (Excluding public telegraph
service) and Mumbai Telephone District of the Department of
Telecommunications and to plan, establish , develop, provide, operate and
maintain all types of telecommunication services including Telephone, telex,
wireless, data communication, telemetric and other like forms of
communication.

 OBJECTIVE :-

To raise the necessary finance to meet its own

developmental needs and also that of the telecommunications board of the
Department of Telecommunication.

 VISION :

"To remain market leaders in providing world

class telecom and IT related services and to become a global player"

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 MILE STONES :

YEAR DETAILS
28.01.1882 First Telephone exchange in Mumbai using Law's
call wire equipment commissioned by Mumbai
Telephone company at fort
1892-1893 All Exchanges converted into Magneto
Exchanges.
1896 Introduction of phonogram at Bombay
1906-1910 Underground cables introduced.
24.05.1924 Auto Exchanges opened for the first time in
India.
1932 Automatic time announcing machine with disc
records installed.
1941 Charging by meter introduced.
April , 1943 Bombay Telephone Company is taken by
Government with 21000 lines.
1950-55 Steps by step stronger exchanges commissioned.
1956-60 Central Disk tape recorder type announcement
introduced.
1966-70 Penta Conta cross Bar Exchange installed for the
first time in Mumbai.
1971-75 One Max -2 exchange commissioned with STD to
Mumbai on 6.9.1975 at vashi, Navi Mumbai.
Vashi demand trunk service introduced.
Demand trunk to BG, CA and BRD introduced.
Telephone accounting computerized.
Telephone directory (English) compiled for the
first time.
Time announcement (175) in Marathi & Hindi
introduced.
STD to madras, Nagpur & Gandhi Nagar
introduced.
Demank trunk at home street & prabhadevi
commissioned.
INTELEX commissioned.
1975 First PCM system between city & Andheri
commissioned
1976-78 STD to various stations, ISD to London
introduced.
1978-79 C-400 Hitachi Crossbar Commissioned on 26.5.78
at Malabar Hill
1983-84 SPC analog exchange commissioned at
Cooperage.

15
1985-86 E10B exchange commissioned at Worli- 3 South
Colaba , Walada -2 , Central & Ghatkopar -2 .
Navi Mumbai Telecom District formed on 1.4.85
ISD to USA and some of other European
countries introduced.
Panvel, Taloja, Nhava & Uran taken over from
Maharashtra Circle.
1986-87 Formation of MTNL on 1.4. 86
1987-88 Large scale introduction of Push Button
instruments.
1988-89 Phone Plus services introduced for subscriber
numbers connected with Electronic exchanges.
1991 I-net system commissioned.
1992-93 Fetex -150 commissioned at Fountain -3 and
Thane RLC-1 Voice Mail service commissioned at
Prabhadevi.
Radio paging commissioned at Prabhadevi
197 special services made non- metered.
1993-94 First OCB switch in the network introduced at
Kandivali.
1994-95 First EWSD exchanges introduced in network at
Vileparle and Borivali.
1995-96 Usage of automatic number announcement
services introduced. Interactive fault repair
service introduced.
1996-97 ISDN services introduced commercially. Autocom
service introduced.
1997-98 Waiting list for new connection brought to NIL.
Total of 213475 connections added to the
system.
1998-99 IN( Intellegent Network ) service introduced.
Internet service commenced and MTNL became
an ISP.
1999-2000 MTNL Mumbai crossed the 2 million mark in
subscriber base. MTNL became 100% electronic.
2000-2001 MTNL Launched its GSM Service under the Brand
Name "Dolphin" on 27th February, 2001.
2001-2002 MTNL got listed at New York Stock Exchange on
06/11/2001, One more connection that brings
more transparency in its operation.
2002-2003 TRAI adjudged MTNL as "Best Telecom Service
Provider".
Prepaid Service under the Brand Name of Trump
has been launched simultaneously in Mumbai &
Delhi on 14/01/2002.
2003-2004 MTNL becomes No.1 in Internet Service Provider
in Delhi and Mumbai.

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  JOINT VENTURES OF MTNL :-

Mahanagar Telephone Mauritius Limited (MTML)

MTNL has set up its 100% subsidiary, Mahanagar Telephone Mauritius

Limited. (MTML) in Mauritius, for providing basic mobile and
international long distance services as second operator in Mauritius.
Necessary licenses were obtained in January 2004. MTML has already
started its ILD & CDMA based basic services in Mauritius. In Mauritius,
44,312 telephone connections are actually operational from a total
switching capacity of 50,000. Moreover, through joint ventures with
local telecommunications providers, MTML plans to offer internet
access through its wireless network to its users in February 2007.

MTNL-STPI IT Services Limited

MTNL-STPI IT Services Ltd. is a 50:50 Joint Venture between

Software Technology Parks of India (STPI) and Mahanagar
Telephone Nigam Limited, (MTNL). The JV formed in 2006 combines
the STPI's rich experience as an ISP and MTNL's track record of
being India's leading telecom operating company to offer niche
portal services to the Indian community. The JV was formed to
realize one of the 10-point agenda of MoC&IT, which are of extreme
importance to India for bringing about an all-round economic
development. The JV aims to provide exclusive data center services,
messaging services, business application services to the identified
sectors of economic activity and thereby also popularizing the .in
domain in the networked community across the world.

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Millennium Telecom Limited (MTL)

MTNL has restructured Millennium Telecom Ltd. (MTL) as a

Joint Venture company of MTNL and BSNL with 51% and 49% equity
participation respectively. The company will now be entering into
new business stream of international long distance operations and
will be executing a project of submarine cable system, both east
and west from India.

 CURRENT SCENARIO:-

The Board of Directors of MTNL has taken on record the Unaudited

Reviewed Financial Results for the 4th quarter ended on 31.03.2010. MTNL
has made an impressive performance during this quarter ended
31.03.2010 despite its operations being geographically limited to the
already saturated metros of Delhi and Mumbai, and stiff competition from
other operators. MTNL’s Broadband, 3G and IPTV Services are finding great
popularity in Delhi and Mumbai. MTNL, despite the fact that it provides
Broadband services only in Delhi & Mumbai, with 815,830 Broadband
subscribers on its roll, has become the second largest Broadband service
provider in the entire country only after BSNL. MTNL is making all out
efforts to address and meet ever increasing demand of its new services.
MTNL 3G Subscriber base has gone to 3.48 lakhs subscriber in a short
period of time.

MTNL has generated income from services during the 4th quarter of FY
2009-10 of Rs.8483.31 million as compared to Rs.10687.95 million during
the corresponding quarter of previous year. This decline is partly due to
reduction in tariffs to meet competition. Against other income of
Rs.2752.02 million during the 4th quarter of previous year ended on
31.03.2009, MTNL has earned other income of Rs.7719.40 million during
this quarter with an increase of Rs.4967.38 million.
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During the year ended 31.03.2010, 607,777 GSM mobile phone customers
and 120,330 Broadband customers were added. In the period of April 09 to
March 2010, MTNL’s GSM Cellular service customer base grew by 14.55%
and Broadband service customer base grew by 17.30%.

19
 LITERATURE REVIEW

 Sun Jinping

This paper is published by Journal of Public Budgeting, Accounting &

Financial Management. This paper includes discussion about revenue
forecasting.

Forecasting is an integral part of organizational decision-making,

which lays the foundation for the successful operation of an
organization and stays at the center of the organization's long-term
planning and development (Klein, 1984; Makridakis, 1996). In the
same vein, government revenue forecasting,1 as the starting point of
government budget cycle, sets the level of future government
spending and plays an important role in government budgeting and
financial management process.

A review of the literature on government revenue forecasting in

the two directions suggested by Bretschneider and Gorr indicates that
the attention devoted to forecasting methodologies far outweighs the
attention given to revenue forecasting as an organizational activity.
Even on the organizational dimension, forecasting methodology
occupies an important position and accuracy has been the primary, if
not sole, criterion in selecting forecasting methods.

being informative to forecast users, and being relatively

inexpensive and easy to use (Agostini, 1991). While the technical part
of government revenue forecasting is important, revenue forecasting
is a science only up to a point; it is also an art. After all, a budget is
first and foremost a public statement that reflects policies and
20
 priorities and is fraught with political considerations, and revenue
forecasting is better understood in the proper context of
governmental and political system. In brief, government revenue
forecasting "is not just a technical or statistical area, but
the domain of psychology, sociology, politics, management science,
economics, and other related disciplines" (Makridakis & Wheelwright,
1987, p. 3), and the study of government revenue forecasting should
go beyond those technical concerns.

 Gaurav Doshi

This is the article which talks about the revenue management and
published by one website naming www.ezinearticles.com. Revenue
management first noticed and accepted by the airline industry. Many
travel and hospitality companies have been focused to the "adapt or
perish" hymn while moving towards revenue management. Today,
revenue management processes and systems are implemented in
number of industries, including manufacturing, advertising, energy,
hi-tech, telecommunications, car rental, cruise line, railroad and
retail. In the future, companies that ignore revenue management will
be at a serious disadvantage.

Actually, revenue management is the concept of adopting the

number of implementation of emerging and changing business
strategy to revenue management, where you can generate additional
revenue from 3% to 8 % and it resulting in possible profit increment
of 50% to 100%.

Revenue Management is the application of exercised strategy that

estimates consumer behavior at the micromarket level and make the
most of product availability and price to maximize revenue growth.

21
 Revenue Management is about optimizes revenue from offered
business.

Revenue Management is a solid management science that utilizes

statistical and mathematical concepts, based on operations research
and management science methodology and tools in changing
marketing environment to provide information too.

 Jerry McCaffery

This paper is written by Jerry McCaffery and published by

American society for public administration. This paper talks about the
revenue budgeting n also tells about characteristics.

Revenue budgeting is an approach to the budget decision rather than

a particular budget system. All of the budget systems enumerated can
be used in conjunction with a revenue budgeting approach. However ,
what revenue budgeting does emphasize is the ascendary of the
revenue constraint in budgeting calculations. This ascendary manifests
itself various ways. The following propositions are offered to help
describe what revenue budgeting means for budgeting in urban areas

 Decision makers are constrained by actual limitations on

revenue raising powers and/or the perception of impending
limitations, and fears about the reliability of other revenue
sources. Consequently, they increase search activity for
new local revenue sources and non-local revenue sources

 Continued public demand for services is complicated by

additional service delivery resulting from activities
mandated by other level of government. Thus ,service

22
 demand continues to grow and to the finance that growth
will be appearing to be shrinking

 Unmet need increase and actual service cutbacks occur as

inflation drives the unit cost of service up faster than
revenue growth. Not only is the rate of service growth
retarded, but actual cutbacks occur.

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 OBJECTIVES OF THE STUDY

The objectives of the study, which is stated as below:

 To study what exactly the budgeting and revenue budgeting means

 How organization conducts Budgeting process
 To study the concept of the revenue budgeting
 The main objective behind this research is to study revenue budget process
cycle in the organization

 SCOPE OF THE STUDY

The present study attempts to analyze the Revenue Budgeting of

Mahanagar telephone Nigam Ltd. Various revenue budgets are studied to
understand that how exactly company works on the budgeting .

From the above analysis and findings, researches have attempted

to give useful suggestions.

 PERIOD FOR THE STUDY

The duration of the study was for two month i.e., for eight weeks.

 LIMITATIONS OF THE STUDY

 Inter firm comparison is excluded

 As per the company policies many confidential data cannot be

produces as research part

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 Chapter scheme

This project has been classified in to four chapters

 The First Chapter deals with “INTRODUCTION” which includes

Background of the problem, Company profile, Statement of the
problem, Objectives, Period of study, scope of the study, Limitations
and Chapter Scheme.

 The Second chapter deals with, “RESEARCH METHODOLOGY” which

includes Problem statement, research process, research design, data
collection, tools used for data collection, sources of data.

 The Third Chapter deals with; “ANALYSIS AND INTERPRETATION” in

which real time observation, its analysis and interpretation are
described.

 The Fourth chapter deals with; “Findings and conclusion”. This

chapter includes the findings and conclusion.

25
 CHAPTER II

RESEARCH METHODOLOGY

26
 RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research

problem. It also understood as a science of studying how research is done
scientifically.

In this project under research methodology I have covered the

steps adopted by me while studying this research problem. While doing
research it becomes necessary not only to know the research methods and
techniques but also the methodology adopted. It gives proper direction to
research.

RESEARCH PROCESS followed:

Research process consist of series of steps or actions to effectively carry out

research and the desired sequencing of these steps.

Here I am mentioning the steps which are followed while conducting this
research.

1. Formulating Research Problem

a. Extensive Literature Survey

b. Development of working Hypothesis

2. Preparing research design

a. Determining sample design

3. Collecting Data

a. Collection of primary data

b. Collection of secondary data

27
 4. Analysis of data

a. Hypothesis testing

5. Generalization and interpretation

6. Preparation of Report

RESEARCH DESIGN

A research design is the arrangement of conditions for collection and

analysis of a data in a manner that aims to combine relevance to the
research purpose with economy in procedure.

Research design is the conceptual structure within which research is

conducted. It constitutes the blueprint for the collection, measurement and
analysis of data.

Research design

1. Descriptive Design :

Descriptive research design is a scientific method which involves

observing and describing the behavior of a subject without
influencing it in any way. This method is adapted to obtain a
general overview of the subject.

2. Case – Study Design :

A case study is an in depth study of a particular situation rather

than a sweeping statistical survey. It is a method used to narrow
down a very broad field of research into one easily researchable

28
 topic.

DATA COLLECTION

While deciding about the method of data collection to be used for the
study, two types of data are considered.

1. Primary Data

2. Secondary Data

Primary Data

Primary data are those which are collected afresh and for the
first time, and thus happens to be original in character. Primary data is
collected during the course of doing experiments.

Secondary Data

Secondary data are those which have already been collected by

someone else and which have already been passed to the statistical
process.

Both types of data are collected for particular research.

Primary Data is collected from the finance (Budgeting) department Of

MTNL, whereas secondary data is collected from the website of MTNL,
other websites, annual reports, reports etc.

TOOLS USED FOR DATA COLLECTING

29
 Observation is one of the tools which are used for the data collection in
the research.

The other tools used for the data collection is interview. In this research
many people in the management, Budget officers are interviewed.

SOURCE OF DATA

There are two sources of data:

 Primary source
 Secondary source

1. PRIMARY DATA

Information collected is mainly based on discussion with the

management and interview with the concerned officers and staff.

2. SECONDARY DATA

Secondary data has been collected from audited annual reports and
internal reports and websites etc.

30
 CHAPTER III

ANALYSIS AND INTERPRETATION

31
 MAHANAGAR TELEPHONE NIGAM LTD.

BUDGETING

MTNL i.e. Mahanagar Telephone Nigam LTD. has 19 different units located
across Mumbai. This units are divided on the basis of functional,
geographical and revenue. This division is done in order to run & maintain
them in a much effective way. The different units are as follows:

Unit Description Description

1. B&W Building & Works Functional
2. CDMA CDMA Operation Functional/ Revenue
3. Central Central Geographically/ Revenue
4. (CETTM) Training Centre Functional
5. E-1 East-1 Geographically/ Revenue
6. E-2 East-2 Geographically/ Revenue
7. E-P External Planning Functional
8. I-P Internal Planning Functional
9. GSM GSM Operation Functional/ Revenue
10. MA Material Account Functional
11. NM Navi Mumbai Geographically/ Revenue
12. NOR North Geographically/ Revenue
13. SOUTH South Geographically/ Revenue
14. T-1 Lease Circuit/ Call Centre Functional
15. T-2 Traffic-2 Functional
16. Trans Transmission Functional

32
17. W-1 West-1 Geographically/ Revenue
18. W-2 West-2 Geographically/ Revenue
19. W-3 West-3 Geographically/ Revenue

33
 Budget Flow – Chart in MTNL

This picture shows the Budget flow of the organization. In the

case of preparation of budgets the process flows from down to upward i.e.
different 19 units prepares their budget and send to the higher management
to the approval. Where as in second case, while allotting the budget as per
demands this process flows from upward to downward.

34
Budgeting Elements:

 Budget Estimates(BE):

These figures are the budget estimates of the financial year.

 Revised Budget (RE):

These figures are actually the revision of the budget estimates

(BE) of the same financial year.

Responsibilities of Each level:

 Different accounting units of Mumbai prepares revised estimate and

budget estimate i.e. preparation of BE and RE budget.

 Budget unit of Mumbai

o Consolidates RE and BE demand of all areas of Mumbai unit.

o Does the weekly consolidation of fund demands and the

distribution of the same.

o Allotment of the budget to the different areas of Mumbai unit.

 General Manager (Budget and banking) consolidates budget of

RE and BE demand of the Mumbai and Delhi unit and prepares the final
budget for MTNL

35
 BUDGETING PROCESS

The budget of MTNL, Mumbai consists:

 Capital Budget

 Revenue Budget

 Loans and Advances

 Income Projection

The entire consolidated estimate is sent to General

Manager (Budget and Banking) Corporate Office, New Delhi for further
discussion and scrutiny. A detailed discussion is carried out for the various
demands made. After this, the fixed approval for the fund allotment is given
by Board of Directors. The Corporate Office in Delhi provides the allotted
fund to the Budget section in Mumbai which in turn allots the fund to
different units as per their demands.

The Budget section allots the fund to different units in

the same ratio in which the Corporate House has allotted it the funds. If out
of the total demand, only 50% allotment is made by the Corporate House,
then the Budget section will only allot these much fund under that head to
different units. If any of the HOA (Heads of Account) is allotted very less fund
as compared to the actual demand, that fund is kept with the Budget section
for future & is given to others as per the need.

36
37
Capital Budget:

A plan to finance long-term outlays, such as for assets like facilities and
equipment. It is budget for major capital, or investment, expenditures.

Every unit has various components for which funds are requested / allotted
every year. These components are necessary for smooth functioning of the
unit. Some of the important components are:

 Building

 Cable and Duct

 Computer

 Electric Appliances

 Office machinery & Equipment

 FUR & FIX (Furniture & Fixture)

 A & P (Apparatus & Plant)

 Rehabilitation

 Land

 Lines & wires

 Vehicles
38
All these components collectively account for the Capital expenditure of the
company.

Revenue Budget:

A revenue budget identifies each of the individual revenue sources for which
the organization is to be responsible; estimates the amount of revenue each
is to "earn" in the budget year; documents the basis for the estimate and
other important information about each source; and assigns responsibility for
revenue management (including estimate updating) to a specific
organization unit/manager. A management responsibility to be associated
with revenue budgeting is the development of monthly plans for revenue
recognition and collection.

Revenue Budget are prepared in above Performa by the all 19 accounting

units of the MTNL, Mumbai.

Loans and Advances:

MTNL had a policy to grant different types of loans and advances to their
employees. For this budget are also required to prepare. . The Head of
Account for loans and advances is 1200 as shown in the table. Hence, any
head of account starting with 12 can be termed under loans and advances.
Some of the main components under this section are:

 HBA (House Building Advance)

 Car Advance

 Computer Advance

39
 Festival Advance

 Children Education Advance

40
 REVENUE BUDGETING

As a part of the budgeting process MTNL i.e. Mahanagar Telephone Nigam

LTD. Undergoes process of revenue budgeting.

REVENUE BUDGETING PROCESS (at MTNL)

Revenue budgeting process takes place in following stages

1. Preparation of Budget at Unit level

2. Consolidation of all units budget in One Final

3. Approving Revenue Budget

4. Allotting Budget as per demand

41
 PREPARATION OF BUDGET AT UNIT LEVEL

Every unit prepares their own budget of revenue forecasting.

This forecasting is done after analysis of the various elements involved in
revenue generation. These are the elements identified by the budgeting
team.

Performa used by the Team while preparing for budget is as

follows. All 19 units use the same Performa. To maintain uniqueness while
preparing budget this Performa is followed because all units sends their
budget to the budget unit of the Mumbai where all units budget get merged
and one single budget from Mumbai Operations is sent to the higher
management to the approval. So as a convention part every unit maintains
their budget in this format.

PERFORMA

HOA (4 DETAIL ACTUAL BE ACTUAL RE BE

DIGIT) ALOT EXPD. UP TO

2008- 2009- 2010-
JUNE 09
2009 2009- 10 11

10

42
Head of Account’s (HOA). The different heads of account are as follows:

HOA DESCRIPTION

2700 PAYMENT & PROVISION FOR EMPLOYEES

(OTHER THAN OPERATING & MAINTANANCE STAFF)

2800 OPERATING EXPENSES

3000 OFFICE & ADMINISTRATION (OTHER THAN OPERATING

& MAINTENANCE EXPENSES)

3100 BUSINESS PROMOTION & MARKETING EXPENSES

3200 MAINTENANCE OF REVENUE EARNING ASSETS

3400 HUMAN RESOURCE DEVELOPMENT EXPENSES

4100 PAYMENT & PROVISION OF EMPLOYEE – MS

4200 OFFICE & ADMINISTRATION – MS

1200 LOANS & ADVANCES (TO EMPLOYEES)

43
These Heads of Accounts are further classified according to the type of
expense in order to recognize/represent them in individual way rather than
as a group expense. For example, 2801 is an operating expense related to
the ‘Salary’ head. There are other heads related to Operating Expenses and
all of them would have Heads of Accounts starting with 28 as 2800
represents the Operating Expenses.

Some of such Operating Expenses along with their HOA’s are listed below:

44
HOA Description

2801 Salaries

2803 Overtime

2804 Medical Expenses

2806 Leave Travel Concession

2808 Conveyance Reimbursement

2809 Uniform

2811 Staff Welfare

2812 Subsidy to Department Canteen

2814 Private Workmen Compensation

2815 Employer’s Contribution to CPF

2818 Rent on Buildings

2819 Rates and Taxes

2820 Insurance

2821 Electricity Charges

2822 Water Charges

2823 Vehicle Running Expenses

2824 Hiring Charges

2825 Repairs and Maintenance

2826 Travelling Expenses

2827 Conveyance Charges

2828 Printing

2829 Stationary

2831 Freight Charges

2832 Computer Machine Charges

45
 2833 General Expenses

2834 Honorarium

2840 Incentives

2845 Awards and Prizes

2846 Internet Charges

2895 Compensation to Officers

Similarly other Heads of Account also have different expense heads under
them and the total sum of all these expense heads amounts to the final
expense under that particular Head of Account.

46
 CONSOLIDATION OF ALL UNIT’S BUDGET IN ONE FINAL

Consolidation of the different unit’s budget takes place in the

budget unit of Mumbai which is the main/head office for all activities in
Mumbai operations. So every unit sends their budget file to the main budget
unit located at Mumbai in unique format given by higher authorities.

Budget unit Mumbai accepts these budgets from different units

and start working on making this budget into the one single final budget.
This final budget then forwarded to the Delhi operations.

While consolidating the budget the boundaries or segregation of

19 units get dissolved and one final revenue budget comes into the
existence which is purely based on the HOA (Head of accounts).

Mumbai’s Budget unit merges the revenue budget came from

units according to their head of accounts. Particular Head of Account shows
the total requirement /demand / estimates of the whole Mumbai operations.
There is no differentiation like east zone requires 19 lacs for administrative
expenses, GSM zone requires 18 Lacs. The wholesome of all units is shown in
the budget.

Conventions are followed when any budget unit whether it is

Mumbai or Delhi finalizes the budget. Certain rules and regulations are
followed. Performa used while preparing final budget is as follows:

47
 Along with consolidation of budget into one final budget
department also have to calculate the percentage of share in particular
account head for a particular unit. When department is in the process of
consolidation it need to identify that a single unit has asked for how much
amount and calculates the percentage of that amount to the total amount
which is represented in final budget.

Doing this helps the unit to identify the share of unit in any head.
So that when budget is get approved from the Delhi authorities then Mumbai
budget unit allots the amount according to percentage. Normally Budget
approval from higher authorities is not 100 percent so in this situation
Mumbai unit allots the approved amount to the units in calculated
percentage wise.

48
 APPROVING REVENUE BUDGET

The entire consolidated estimate or we can say final budget is

sent to General Manager (Budget and Banking) Corporate Office, New Delhi
for further discussion and scrutiny.

A detailed discussion is carried out for the various demands

made. This discussion includes company current position, last year’s
revenue, company’s investments plan, expansion plan, last year’s income
from particular source etc.

After this, the fixed approval for the fund allotment is given by
Board of Directors. This approval is also in consolidated format.

The Corporate Office in Delhi provides the allotted fund to the

Budget section in Mumbai which in turn allots the fund to different units as
per their demands.

49
 ALLOTING BUDGET AS PER DEMAND

Revenue budget received from corporate office Delhi is then

distributed to respective units according to demand and estimates sent by
them. As mentioned before department have calculated percentage share of
unit in HOA. Allotment is done on percentage basis:

50
 CASE – STUDY

AT DIFFERENT UNITS OF MUBAI (19 UNITS)

B-W UNIT

HOA (4 BE10-11

DIGIT) DETAIL Demand

270101 Pay(NE-CDA) 92

270102 DA NE CDA 57

270103 HRA NE CDA 37

270104 CCA NE CDA 3

51
 ADHOC RELEIF NE
270112 1
CDA

TRANSPORT

270114 ALLOWNCE NE 1

CDA

DP TO NE CDA PAY
270128 38
SCALE

SALARIES NE
Total 229
(CDA)

OVERTIME
270302 10
ALLOWNCE

MEDICAL

270402 EXPENSES NE-IDA 668

(WITH BILLS)

52
 MEDICAL

270403 EXPENSES EXE- 77

CDA(WITH BILLS)

MEDICAL

EXPENSES
270404 917
EXCUTIVE-IDA

WITH BILLS

MEDICAL EXP. NE-

270405 CDA (WITHOUT 8

BILLS)

MEDICAL EXP IDA

270406 NE(WITHOUT 1020

BILLS)

MEDICAL EXP .CDA

270407 85
EXE

MEDICAL

ALLOWANCE EXE-
270408 1380
IDA(WITHOUT

BILLS)

53
 INDOOR MEDICAL
270410 1245
EXP-NE-IDA

INDOOR MEDICAL
270412 1776
EXP.-EXE-IDA

TOTAL MEDICAL EXP 7176

LEAVE TRAVEL

270602 CONCESSION NE 126

IDA

LEAVE TRAVEL

270603 CONCESSION EX 72

CDA

LEAVE TRAVEL

270624 CONCESSION EX 433

IDA

54
TOTAL LEAVE TRAVEL 9892

CONCESSION

271101 STAFF WELFARE 1

NE CDA

STAFF WELFARE
271102 81
NE IDA

STAFF WELFARE
271104 2
EXE-IDA

TOTAL STAFF WELFARE 84

HONORARIUM NE –
271802 0
IDA

55
271902 INCETIVE NE-IDA 3

275001 PAY(NE-IDA) 13259

275002 IDA(NE-IDA)) 12584

275003 HRA(NE-IDA) 8441

275004 CCA(NE-IDA) 433

WASHING

275005 ALLOWANCE(NE- 119

IDA)

56
 CHILDREN

EDUCATION
275009 290
ALLOWANCE(NE-

IDA)

ADHOC RELIEF NE
275012 4036
IDA

TRANSPORT
275014 861
SUBSIDY NE-IDA

FOOD ALLOWANCE
275015 331
NE IDA

OUTDOOR
275501 26
TREATMENT-NE

HOSPITALISATION
275005 101
CHARGES-EXE

57
 SALARIES NE
TOTAL 40481
(IDA)

277101 PAY(EXE-CDA) 2571

277102 CDA(ECE-CDA) 786

277103 HRA(EXE-CDA) 406

277104 CCA(c)(EXE-CDA) 17

ADHOC RELIF
277112 525
(EXCUTIVE CDA)

58
 TRANSPORT

277114 ALLOWANCE (EXE- 157

CDA)

DP TO EXE CDA
277115 378
PAY SCALE

SALARIES EXE
TOTAL 4840
(CDA)

277201 PAY EXE IDA 29516

277202 IDA EXE IDA 20217

277203 HRA EXE IDA 9632

59
277204 CCA EXE IDA 359

CHILDREN

EDUCATION
277209 249
ALLOWANCE EXE

IDA

ADHOC RELIEF
277212 5958
EXE-IDA

TRANSPORT

277214 ALLOWANCE EXE – 838

IDA

SALARIES
TOTAL 682125
EXE(IDA)

COMPENSATION

279501 TO OFFICER EXE 275

CDA

60
282200 WATER CHARGES 259

BULDING 58465.8
282501
CHARGES 2

ELECTICAL
282505 7515.18
FITTINGS

282506 COMPUTER 1.26

65982.2
TOTAL B&W
8

61
 CONSOLIDATED BUDGET

ACTUA

ACTUA BE L
RE BE
L ALOT EXPD.
HOA DETAILS 2009- 2010-
2008- 2009- UP TO
10 11
2009 10 JUNE

09

2701 SALARIES NE(CDA) 1791 2692 686 2260 2486

OVERTIME
2703 962 1059 155 1199 1319
ALLOWANCE

2704 MEDICAL EXP(CDA) 166846 183531 33942 148673 163540

LEAVE TRAVEL
2706 12777 14055 2202 8992 9892
CONCESSION

LEAVE SALARY
2707 ENCASHMENT NE- 0 0 0 0 0
IDA

CONVEYANCE
2708 0 0 0 0 0
REIMBURSEMENT

2709 UNIFORM 0 0 0 0 0

62
2711 STAFF WELFARE 51958 57153 1739 10501 11551

SUB TO DEP
2712 78 86 16 84 93
CANTEEN NE-CDA

LEAVE SALARY
2713 266860 293551 85427 629294 692223
CONTRIBUTION

EMPLOYER`S
2715 CONTRI.TOWARDS 0 0 0 0 0
CPF

152530 167783
2716 GRATUITY 490000 539000 208377
6 7

2718 HONORARIUM 65 91 4 53 58

2719 INCENTIVE 746 861 147 711 782

PENSION 268694 295536 110653 267621 294383

2720
CONTRIBUTION 4 9 7 3 4

167178 175409 180053 197558

2750 SALARIES NE (IDA) 429706
5 2 5 9

MEDICAL EXPENSES
2755 16026 22278 1924 12083 13291
TO RETIRED STAFF

PAYMENT & PROV

2770 0 220 0 29 31
FOR APPRENTICES

63
 SALARIES (EXE
2771 36655 53205 7283 52355 57590
CDA)

2772 SALARIES (EXE IDA) 540740 567184 133404 620114 682125

COMPENSATION TO
2795 2397 2455 2 250 275
OFFICERS

2801 SALARIES NE (CDA) 3176 4376 419 1271 1398

OVERTIME
2803 948 1043 128 657 723
ALLOWANCE

MEDICAL EXPENSES
2804 106093 116702 20470 107978 118776
(CDA)

LEAVE TRAVEL
2806 7171 7888 1544 6453 7098
CONCESSIOON

CONVEYANCE
2808 0 0 0 0 0
REIMBURSEMENT

2809 UNIFORM 0 0 0 0 0

2811 STAFF WELFARE 15144 16658 1349 7075 7783

SUBSIDY TO DEPT
2812 30 33 0 14 15
CANTEEN NE CDA

64
 PAYMENT UNDER
2814 WORKMEN COMP 0 0 0 0 0
ACT NE CDA

EMPLOYER`S
2815 CONTRI.TOWARDS 0 0 0 0 0
CPF

2818 RENT ON BUILDING 14370 10993 4112 14837 16320

2819 RATES & TAXES 79386 67871 31751 89916 98908

2820 INSURANCE 169 106 12 111 122

ELECTRICITY & FUEL

2821 398457 372576 145838 447470 492217
CHARGE

2822 WATER CHARGES 19974 15884 5493 16957 18653

VEHICLES RUNNING
2823 1282 1282 243 1063 1169
EXPENSES

2824 HIRING CHARGES 6348 5713 1568 8758 9634

2825 0 118986 0 128697 141566

TRAVELLING
2826 507 411 12 405 445
EXPENSES

65
 CONVEYANCE
2827 617 524 178 873 960
CHARGES

2828 PRINTING 9923 2735 209 3108 3419

2829 STATIONERY 2283 1768 278 1851 2036

POSTAGE,TELEGRAM
2830 25536 5982 156 15979 17577
& M.O.CO

2831 FREIGHT CHARGES 279 39 10 44 49

COMPUTER MACHINE
2832 1586 1348 105 1876 2064
CHARGES

2833 GENERAL EXPENSES 4173 3547 1090 4995 5494

2834 HONORARIUM 1 3 2 3 3

LEASING CHARGES
2837 0 0 0 0 0
ON ASSETS

2840 INCENTIVE 558 433 116 550 605

2841 SMALL TOOLS 0 61 3 36 40

66
 COMMISSION ON
2844 FRANCHISE 843240 515526 112644 577614 635376
SERVICES

2845 AWARDS & PRISES 53 21 0 38 42

EXPENDITURE ON
2846 327000 132598 57251 138741 152615
INTERNET SERVICES

143369 150171 158653 174518

2850 SALARIES NE IDA 348631
2 3 1 5

SALARIES EXE
2871 1716 2354 247 3453 3798
(CDA)

SALARIES EXE
2872 105777 111523 28282 131369 144506
(IDA)

COMPENSATION TO
2895 76 81 0 38 41
OFFICERS

67
 APPROVED BUDGET

BE BE
ACTUAL
ACTUAL RE BE
ALOT EXPD. A LOT
HOA DETAILS 2008- 2009- 2010-
2009- UP TO
2010-
2009 10 11
10 JUNE 09
11

2701 SALARIES NE(CDA) 1791 2692 686 2260 2486 2486

OVERTIME
2703 962 1059 155 1199 1319 1319
ALLOWANCE

2704 MEDICAL EXP(CDA) 166846 183531 33942 148673 163540 163540

LEAVE TRAVEL
2706 12777 14055 2202 8992 9892 9892
CONCESSION

LEAVE SALARY
2707 ENCASHMENT NE- 0 0 0 0 0 0
IDA

CONVEYANCE
2708 0 0 0 0 0 0
REIMBURSEMENT

2709 UNIFORM 0 0 0 0 0 0

2711 STAFF WELFARE 51958 57153 1739 10501 11551 11551

68
 SUB TO DEP
2712 78 86 16 84 93 93
CANTEEN NE-CDA

LEAVE SALARY
2713 266860 293551 85427 629294 692223 692223
CONTRIBUTION

EMPLOYER`S
2715 CONTRI.TOWARDS 0 0 0 0 0 0
CPF

167783 167783
2716 GRATUITY 490000 539000 208377 1525306
7 7

2718 HONORARIUM 65 91 4 53 58 58

2719 INCENTIVE 746 861 147 711 782 782

PENSION 294383 294383

2720 2686944 2955369 1106537 2676213
CONTRIBUTION 4 4

197558 197558
2750 SALARIES NE (IDA) 1671785 1754092 429706 1800535
9 9

MEDICAL EXPENSES
2755 16026 22278 1924 12083 13291 13291
TO RETIRED STAFF

PAYMENT & PROV

2770 0 220 0 29 31 31
FOR APPRENTICES

SALARIES (EXE
2771 36655 53205 7283 52355 57590 57590
CDA)

69
2772 SALARIES (EXE IDA) 540740 567184 133404 620114 682125 682125

COMPENSATION TO
2795 2397 2455 2 250 275 275
OFFICERS

2801 SALARIES NE (CDA) 3176 4376 419 1271 1398 1398

OVERTIME
2803 948 1043 128 657 723 723
ALLOWANCE

MEDICAL EXPENSES
2804 106093 116702 20470 107978 118776 118776
(CDA)

LEAVE TRAVEL
2806 7171 7888 1544 6453 7098 7098
CONCESSIOON

CONVEYANCE
2808 0 0 0 0 0 0
REIMBURSEMENT

2809 UNIFORM 0 0 0 0 0 0

2811 STAFF WELFARE 15144 16658 1349 7075 7783 7783

SUBSIDY TO DEPT
2812 30 33 0 14 15 15
CANTEEN NE CDA

PAYMENT UNDER
2814 WORKMEN COMP 0 0 0 0 0 0
ACT NE CDA

70
 EMPLOYER`S
2815 CONTRI.TOWARDS 0 0 0 0 0 0
CPF

2818 RENT ON BUILDING 14370 10993 4112 14837 16320 13353

2819 RATES & TAXES 79386 67871 31751 89916 98908 69935

2820 INSURANCE 169 106 12 111 122 111

ELECTRICITY & FUEL

2821 398457 372576 145838 447470 492217 323870
CHARGE

2822 WATER CHARGES 19974 15884 5493 16957 18653 7695

VEHICLES RUNNING
2823 1282 1282 243 1063 1169 1063
EXPENSES

2824 HIRING CHARGES 6348 5713 1568 8758 9634 5142

2825 0 118986 0 128697 141566 112173

TRAVELLING
2826 507 411 12 405 445 365
EXPENSES

CONVEYANCE
2827 617 524 178 873 960 676
CHARGES

71
2828 PRINTING 9923 2735 209 3108 3419 2797

2829 STATIONERY 2283 1768 278 1851 2036 1666

POSTAGE,TELEGRAM
2830 25536 5982 156 15979 17577 14381
& M.O.CO

2831 FREIGHT CHARGES 279 39 10 44 49 40

COMPUTER MACHINE
2832 1586 1348 105 1876 2064 1688
CHARGES

2833 GENERAL EXPENSES 4173 3547 1090 4995 5494 2475

2834 HONORARIUM 1 3 2 3 3 3

LEASING CHARGES
2837 0 0 0 0 0 0
ON ASSETS

2840 INCENTIVE 558 433 116 550 605 605

2841 SMALL TOOLS 0 61 3 36 40 32

COMMISSION ON
2844 FRANCHISE 843240 515526 112644 577614 635376 635376
SERVICES

72
2845 AWARDS & PRISES 53 21 0 38 42 23

EXPENDITURE ON
2846 327000 132598 57251 138741 152615 138741
INTERNET SERVICES

174518 174518
2850 SALARIES NE IDA 1433692 1501713 348631 1586531
5 5

SALARIES EXE
2871 1716 2354 247 3453 3798 3798
(CDA)

SALARIES EXE
2872 105777 111523 28282 131369 144506 144506
(IDA)

COMPENSATION TO
2895 76 81 0 38 41 34
OFFICERS

73
 APPROVED BUDGET AT BUDGET UNIT IN MUMBAI

BE BE
ACTUAL
ACTUAL RE BE
ALOT EXPD. A LOT Percenta
HOA DETAILS 2008- 2009- 2010-
2009- UP TO ge
2010-
2009 10 11
10 JUNE 09
11

2701 SALARIES NE(CDA) 1791 2692 686 2260 2486 2486 100%

OVERTIME
2703 962 1059 155 1199 1319 1319 100%
ALLOWANCE

2704 MEDICAL EXP(CDA) 166846 183531 33942 148673 163540 163540 100%

LEAVE TRAVEL
2706 12777 14055 2202 8992 9892 9892 100%
CONCESSION

LEAVE SALARY
2707 ENCASHMENT NE- 0 0 0 0 0 0 0%
IDA

CONVEYANCE
2708 0 0 0 0 0 0 0%
REIMBURSEMENT

2709 UNIFORM 0 0 0 0 0 0 0%

2711 STAFF WELFARE 51958 57153 1739 10501 11551 11551 100%

74
 SUB TO DEP
2712 78 86 16 84 93 93 100%
CANTEEN NE-CDA

LEAVE SALARY
2713 266860 293551 85427 629294 692223 692223 100%
CONTRIBUTION

EMPLOYER`S
2715 CONTRI.TOWARDS 0 0 0 0 0 0 0%
CPF

152530 167783 167783

2716 GRATUITY 490000 539000 208377 100%
6 7 7

2718 HONORARIUM 65 91 4 53 58 58 99%

2719 INCENTIVE 746 861 147 711 782 782 100%

PENSION 295536 267621 294383 294383

2720 2686944 1106537 100%
CONTRIBUTION 9 3 4 4

175409 180053 197558 197558

2750 SALARIES NE (IDA) 1671785 429706 100%
2 5 9 9

MEDICAL EXPENSES
2755 16026 22278 1924 12083 13291 13291 100%
TO RETIRED STAFF

PAYMENT & PROV

2770 0 220 0 29 31 31 99%
FOR APPRENTICES

SALARIES (EXE
2771 36655 53205 7283 52355 57590 57590 100%
CDA)

75
2772 SALARIES (EXE IDA) 540740 567184 133404 620114 682125 682125 100%

COMPENSATION TO
2795 2397 2455 2 250 275 275 100%
OFFICERS

2801 SALARIES NE (CDA) 3176 4376 419 1271 1398 1398 100%

OVERTIME
2803 948 1043 128 657 723 723 100%
ALLOWANCE

MEDICAL EXPENSES
2804 106093 116702 20470 107978 118776 118776 100%
(CDA)

LEAVE TRAVEL
2806 7171 7888 1544 6453 7098 7098 100%
CONCESSIOON

CONVEYANCE
2808 0 0 0 0 0 0 0%
REIMBURSEMENT

2809 UNIFORM 0 0 0 0 0 0 0%

2811 STAFF WELFARE 15144 16658 1349 7075 7783 7783 100%

SUBSIDY TO DEPT
2812 30 33 0 14 15 15 99%
CANTEEN NE CDA

PAYMENT UNDER
2814 WORKMEN COMP 0 0 0 0 0 0 0%
ACT NE CDA

76
 EMPLOYER`S
2815 CONTRI.TOWARDS 0 0 0 0 0 0 0%
CPF

2818 RENT ON BUILDING 14370 10993 4112 14837 16320 13353 82%

2819 RATES & TAXES 79386 67871 31751 89916 98908 69935 71%

2820 INSURANCE 169 106 12 111 122 111 91%

ELECTRICITY & FUEL

2821 398457 372576 145838 447470 492217 323870 66%
CHARGE

2822 WATER CHARGES 19974 15884 5493 16957 18653 7695 41%

VEHICLES RUNNING
2823 1282 1282 243 1063 1169 1063 91%
EXPENSES

2824 HIRING CHARGES 6348 5713 1568 8758 9634 5142 53%

2825 0 118986 0 128697 141566 112173 79%

TRAVELLING
2826 507 411 12 405 445 365 82%
EXPENSES

CONVEYANCE
2827 617 524 178 873 960 676 70%
CHARGES

77
2828 PRINTING 9923 2735 209 3108 3419 2797 82%

2829 STATIONERY 2283 1768 278 1851 2036 1666 82%

POSTAGE,TELEGRAM
2830 25536 5982 156 15979 17577 14381 82%
& M.O.CO

2831 FREIGHT CHARGES 279 39 10 44 49 40 82%

COMPUTER MACHINE
2832 1586 1348 105 1876 2064 1688 82%
CHARGES

2833 GENERAL EXPENSES 4173 3547 1090 4995 5494 2475 45%

2834 HONORARIUM 1 3 2 3 3 3 90%

LEASING CHARGES
2837 0 0 0 0 0 0 0%
ON ASSETS

2840 INCENTIVE 558 433 116 550 605 605 100%

2841 SMALL TOOLS 0 61 3 36 40 32 80%

COMMISSION ON
2844 FRANCHISE 843240 515526 112644 577614 635376 635376 100%
SERVICES

78
2845 AWARDS & PRISES 53 21 0 38 42 23 54%

EXPENDITURE ON
2846 327000 132598 57251 138741 152615 138741 91%
INTERNET SERVICES

150171 158653 174518 174518

2850 SALARIES NE IDA 1433692 348631 100%
3 1 5 5

SALARIES EXE
2871 1716 2354 247 3453 3798 3798 100%
(CDA)

SALARIES EXE
2872 105777 111523 28282 131369 144506 144506 100%
(IDA)

COMPENSATION TO
2895 76 81 0 38 41 34 82%
OFFICERS

79
 APPROVED BUDGET AT UNIT LEVEL

HOA

(4 BE10-11 BE10-11 PERCENTAG

DETAIL
DIGIT Demand allotment E

27010
Pay(NE-CDA) 92 92 100%
1

27010
DA NE CDA 57 57 100%
2

27010
HRA NE CDA 37 37 100%
3

80
27010
CCA NE CDA 3 3 100%
4

27011 ADHOC RELEIF

1 1 100%
2 NE CDA

TRANSPORT
27011
ALLOWNCE NE 1 1 100%
4
CDA

27012 DP TO NE CDA
38 38 100%
8 PAY SCALE

SALARIES NE
Total 229 229 100%
(CDA)

81
27030 OVERTIME
10 9 90%
2 ALLOWNCE

MEDICAL
27040
EXPENSES NE- 668 668
2
IDA (WITH BILLS)

MEDICAL
27040
EXPENSES EXE- 77 77
3
CDA(WITH BILLS)

MEDICAL

27040 EXPENSES
917 917
4 EXCUTIVE-IDA

WITH BILLS

MEDICAL EXP.
27040
NE-CDA 8 8
5
(WITHOUT BILLS)

82
 MEDICAL EXP IDA
27040
NE(WITHOUT 1020 1020
6
BILLS)

27040 MEDICAL EXP

85 85
7 .CDA EXE

MEDICAL

ALLOWANCE
27040
EXE- 1380 1380
8
IDA(WITHOUT

BILLS)

27041 INDOOR MEDICAL

1245 1245
0 EXP-NE-IDA

27041 INDOOR MEDICAL

1776 1776
2 EXP.-EXE-IDA

83
TOTA
MEDICAL EXP 7176 7176 100%
L

LEAVE TRAVEL
27060
CONCESSION NE 126 126
2
IDA

LEAVE TRAVEL
27060
CONCESSION EX 72 72
3
CDA

LEAVE TRAVEL
27062
CONCESSION EX 433 433
4
IDA

TOTA LEAVE TRAVEL

9892 631 100%
L CONCESSION

84
27110 STAFF WELFARE
1 1
1 NE CDA

27110 STAFF WELFARE

81 81
2 NE IDA

27110 STAFF WELFARE

2 2
4 EXE-IDA

TOTA STAFF
84 84 100%
L WELFARE

27180 HONORARIUM NE
0 0 99%
2 – IDA

85
27190
INCETIVE NE-IDA 3 3 100%
2

27500
PAY(NE-IDA) 13259 13259
1

27500
IDA(NE-IDA)) 12584 12584
2

27500
HRA(NE-IDA) 8441 8441
3

27500
CCA(NE-IDA) 433 433
4

86
 WASHING
27500
ALLOWANCE(NE- 119 119
5
IDA)

CHILDREN

27500 EDUCATION
290 290
9 ALLOWANCE(NE-

IDA)

27501 ADHOC RELIEF

4036 4036
2 NE IDA

27501 TRANSPORT
861 861
4 SUBSIDY NE-IDA

FOOD
27501
ALLOWANCE NE 331 331
5
IDA

87
27550 OUTDOOR
26 26
1 TREATMENT-NE

27500 HOSPITALISATIO
101 101
5 N CHARGES-EXE

TOTA SALARIES NE
40481 40481 100%
L (IDA)

27710
PAY(EXE-CDA) 2571 2571
1

27710
CDA(ECE-CDA) 786 786
2

88
27710
HRA(EXE-CDA) 406 406
3

27710
CCA(c)(EXE-CDA) 17 17
4

27711 ADHOC RELIF

525 525
2 (EXCUTIVE CDA)

TRANSPORT
27711
ALLOWANCE 157 157
4
(EXE-CDA)

27711 DP TO EXE CDA

378 378
5 PAY SCALE

89
TOTA SALARIES EXE
4840 4840 100%
L (CDA)

27720
PAY EXE IDA 29516 29516
1

27720
IDA EXE IDA 20217 20217
2

27720
HRA EXE IDA 9632 9632
3

27720
CCA EXE IDA 359 359
4

90
 CHILDREN

27720 EDUCATION
249 249
9 ALLOWANCE EXE

IDA

27721 ADHOC RELIEF

5958 5958
2 EXE-IDA

TRANSPORT
27721
ALLOWANCE EXE 838 838
4
– IDA

TOTA SALARIES
682125 66769 100%
L EXE(IDA)

COMPENSATION
27950
TO OFFICER EXE 275 714 100%
1
CDA

91
28220
WATER CHARGES 259 107 41%
0

28250 BULDING
58465.82 46188
1 CHARGES

28250 ELECTICAL
7515.18 5937
5 FITTINGS

28250
COMPUTER 1.26 1 79%
6

TOTA
B&W 65982.28 52126 100%
L

92
 CHAPTER IV

FINDINGS AND CONCLUSION

93
 FINDINGS

 Budgeting constitutes important part of every organization

and so in MTNL.

 Revenue budgeting is important because it plans for

companies revenue generation

 In MTNL every level works and actively involved in revenue

budgeting.

 Final decision on revenue budget is taken by Board of

Directors.

 Revenue budget flows smoothly across every level and

implemented

 Various unexpected factors affects revenue so their presence

in budget becomes important

 Revenues are decrease from Rs.8483.31 million Rs.10687.95

million .

 Among all units GSM unit is having highest revenue

estimates.

 Highest revenue source estimated is employee

94
 SUGGESTIONS

 Use of automatic system will improve efficiency and pace of

working in the organization.

 More co-ordination is required at consolidation level

 Budgeting software should be use to access the archive data.

 Some authorities should be delegated through operational

divisions.

95
  CONCLUSION

Manahnagar telephone Nigam ltd. is the giant telecom

company across delhi and Mumbai undergoes systematic
process of budgeting.

As a part of budgeting company does

1) Capital budgeting

2) Revenue Budgeting

3) Loan and advances

4) Income projection

While concluding this report I would like to say that the

revenue budgeting cycle is follows same approach as their in
theory. Along with that every organization has their own
rules and regulation and conduct to do this.

96
 REFERENCES BIBLIOGRAPHY, WEBSITES USED

a. Bibliography

I)Financial Management

------ Khan and Jain

II) Research Methodology, methods and techniques

---- C R Kothari

III) Articles and journals

b. Websites:

Search Engines:

http://www.google.co.in

Websites:

www.mtnl..net.in

www. business.tafe.vu.edu.au

www.investopedia.com

http://en.wikipedia.org

http://en.Whatis.com

http://managementhelp.org

97